[Cite as Mahle Behr Dayton, L.L.C. v. Ohio Bur. of Workers' Comp. , 2021-Ohio-145.]

IN THE COURT OF APPEALS OF OHIO SECOND APPELLATE DISTRICT MONTGOMERY COUNTY

MAHLE BEHR DAYTON, LLC, et al. Plaintiff-Appellant

v. OHIO BUREAU OF WORKERS’ COMPENSATION Defendant-Appellee : : : : : : : : : : Appellate Case No. 28772

Trial Court Case No. 2018-CV-2230 (Civil Appeal from Common Pleas Court)

. . . . . . . . . . . O P I N I O N Rendered on the 22nd day of January, 2021.

. . . . . . . . . . . JENNIFER L. MYERS, Atty. Reg. No. 0075401, 300 East Broad Stree t, Suite 350, Columbus, Ohio 43215; and RONALD A. FRESCO, Atty. Reg. No. 0059 283, D. PATRICK KASSON, Atty. Reg. No. 0055570, and THOMAS N. SPYKER, Atty. Reg . No. 0098075, 200 Civic Center Drive, Suite 800, Columbus Ohio 43215 Attorneys for Plaintiffs-Appellants JAMES D. ABRAMS, Atty. Reg. No. 0075968, and DAVID J. BUTLER, A tty. Reg. No. 0068455, 65 East State Street, Suite 1000, Columbus, Ohio 43215 ; and JENNIFER D. BRUMBY, Atty. Reg. No. 0076440, 40 North Main Street, Suite 170 0, Dayton, Ohio 45423 Attorneys for Defendants-Appellees

. . . . . . . . . . . . . HALL, J.-2-

{¶ 1} Mahle Behr Dayton, LLC and CPC Parts Delivery LLC appeal from a judgment of the Montgomery County Court of Common Pleas, which dismissed their claims for unjust enrichment and a violation of equal protectio n under the Ohio Constitution against the Ohio Bureau of Workers’ Compensation ( BWC) for lack of jurisdiction. The trial court concluded that the claims sound i n law and that the Court of Claims has exclusive jurisdiction over legal claims against the BWC. We agree and affirm. I. Factual and Procedural Background {¶ 2} In City of Cleveland v. Ohio Bur. of Workers’ Comp ., 159 Ohio St.3d 459, 2020-Ohio-337, 152 N.E.3d 172, the Ohio Supreme Court explained aspects of the Ohio workers’ compensation system that are also applicable to this c ase: Ohio requires public employers that are not self-insured employ ers to contribute to the public insurance fund “the amount of money determined by the administrator of workers' compensation.” R.C. 4123.38. E mployers can choose from a selection of plans. The BWC offers both indiv idual- and group-rated plans. Pursuant to R.C. 4123.29(A), the administrator of the BWC, with the approval of the board of directors, classifies occupations or i ndustries with respect to degree of hazard and risks and sets the premiums tha t employers must pay into the state insurance fund for workers' compensatio n coverage each year. The BWC deposits these premiums into a single state insurance fund (it does not maintain a separate account for each employer ), and it pays compensation benefits associated with work-related acciden ts from-3- that fund. With the exception of a required surplus to maintain solvency, R.C. 4123.321 requires the BWC to establish a procedure for ret urning excess premiums to participating employers in order to maintain a revenueneutral fund.

Cleveland at ¶ 3-4. The procedures for issuing rebates are found in the Ohio

Administrative Code. {¶ 3} In 2017, the BWC announced that there was a surplus for the pol icy year ending June 30, 2016, and that it would be issuing premium reba tes to employers. Mahle Behr and CPC Parts paid premiums during that policy year under the same group-rated plan, and each company received a rebate. But they claim that t heir rebates should have been larger. Mahle Behr and CPC Parts allege that the BWC’s met hod for determining the rebates for employers in their group-rated plan differed fr om its method for determining the rebates of employers in the individual-rated pl ans, resulting in lower rebate amounts for employers in the group-rated plan. {¶ 4} In June 2018, Mahle Behr filed suit against the BWC in the Mont gomery County Court of Common Pleas. Shortly after, CPC Parts moved to intervene in the case, which the trial court allowed. The companies’ complaints assert ed the same claims and asked for the same relief, based on the BWC’s failure to apply the same method for determining their rebates as it applied to determine the rebate s of employers in individualrated plans. Each complaint asked for restitution based on clai ms of unjust enrichment and a violation of equal protection under the Ohio Constitution . The complaints alleged that the BWC had misinterpreted the Ohio Administrative Code an d the Ohio Revised Code and also that that its interpretation was unconstitutional

.-4- {¶ 5} On March 9, 2020, on the BWC’s motion, the trial court dismisse d the complaints for lack of subject-matter jurisdiction, concluding that under the Ohio Supreme

Court’s decision in City of Cleveland v. Ohio Bureau of Workers’ Compensation , the companies’ claims sound in law and therefore the Court of Claim s has exclusive jurisdiction over them. {¶ 6} Mahle Behr and CPC Parts appeal. II. Analysis {¶ 7} The sole assignment of error alleges that the trial court erred by dismissing the case for lack of subject-matter jurisdiction. {¶ 8} “The jurisdiction of the Court of Claims is defined by referenc e to the state’s waiver of immunity in R.C. 2743.02.” Cirino v. Ohio Bur. of Workers’ Comp. , 153 Ohio St.3d 333, 2018-Ohio-2665, 106 N.E.3d 41, ¶ 19. The Court of Cl aims has “exclusive, original jurisdiction of all civil actions against the state pe rmitted by the waiver of immunity

contained in section 2743.02 of the Revised Code.” R.C. 2743.03 (A)(1). The statutory waiver of immunity is broad: “The state hereby waives its immun ity from liability * * * and consents to be sued, and have its liability determined, in the court of claims created in this chapter in accordance with the same rules of law applicabl e to suits between private parties * * *.” R.C. 2743.02(A)(1). {¶ 9} As a general matter, whether the Court of Claims or a court of common pleas has jurisdiction over a claim depends on “whether the claim is legal or equitable.”

Cleveland , 159 Ohio St.3d 459, 2020-Ohio-337, 152 N.E.3d 172, at ¶ 10. T he Ohio Supreme Court explained in Cleveland that “the classification of a claim for restitution as either equitable or legal depends on the traceability of the fu nds the plaintiff seeks to-5- recover.” Pivonka v. Corcoran , Ohio Slip Opinion No. 2020-Ohio-3476, __ N.E.3d __, ¶ 34, citing Cleveland at ¶ 11, 16. {¶ 10} Mahle Behr’s and CPC Parts’ complaints each assert two claims. The first is unjust enrichment based on the BWC’s alleged misinterpretati on and unconstitutional application of Ohio statutes and administrative codes. The seco nd claim asserts a violation of equal protection under the Ohio Constitution based on the BWC’s interpretation of the law. The complaints ask for restitution f rom the BWC for the additional surplus premiums. In essence, the complaints allege that the BW C misinterpreted the Ohio Revised Code and the Ohio Administrative Code. According t o Mahle Behr and CPC Parts, neither law requires or allows the BWC to use a differen t method to determine the rebates of employers in their group-rated plan, and to do so vi olates their constitutional right to equal protection under the law. {¶ 11} The trial court dismissed Mahle Behr’s and CPC Parts’ complaint s based on the Ohio Supreme Court’s decision in Cleveland. In that case, the Court considered whether an employer’s claim for unjust enrichment against the B WC for the reimbursement of alleged excessive premiums paid by the employe r fell within the jurisdiction of the Court of Claims. The plaintiff-employer all eged that the BWC’s method for determining its premiums was flawed and that the BWC had vi olated the Ohio Revised Code, rendering the excess premiums unlawful. The employer soug ht reimbursement of the alleged excessive premiums that it had paid. The Supreme Co urt concluded that the employer’s claim “sounds in law and must proceed through the Co urt of Claims, which has exclusive jurisdiction over legal claims against the BWC.” Cleveland at ¶ 17. It reasoned: “Although the BWC kept track of the amount of [the em ployer]’s premium-6- payments, R.C. 4123.34(A), [the employer]’s premiums went into a general insurance fund, R.C. 4123.30, i.e., they were not kept separate from paym ents made by other public employers. Once [the employer]’s premium payment was deposited into the fund, it became commingled with the premium payments from other employer s.” Id . at ¶ 17. The Court also noted that the employer had paid the last funds it s ought to recover eleven years ago. “It is inconceivable,” the Court said, “how money be longing to Cleveland could ‘clearly be traced to particular funds or property’ in the BWC’ s possession.” Id . at ¶ 17, quoting Great-West Life & Annuity Ins. Co. v. Knudson , 534 U.S. 204, 213, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002). {¶ 12} Mahle Behr’s and CPC Parts’ unjust enrichment claims are essent ially the

same as the one raised in Cleveland . The companies allege that the BWC’s method for determining their rebates was flawed and that the BWC incorrect ly interpreted the Ohio Administrative Code and the Ohio Revised Code. They also seek t he additional excess premiums to which they allege they are entitled under a proper interpretation of the law. Although Mahle Behr and CPC Parts seek reimbursement of excess premiums unlawfully withheld, rather than premiums unlawfully taken, this differenc e is immaterial for purposes of the legal-equitable claim analysis, because their claims, li ke the claim in Cleveland , seek recovery from the BWC’s general insurance fund. The rebate s paid out by the BWC were excess premiums that employers paid into the general fund during the policy year ending June 30, 2016, and the money for the rebates came from t he general fund. So

under Cleveland ’s rationale, any money belonging to Mahle Behr or CPC Parts is not traceable. Therefore, we agree with the trial court that, under Cleveland , the companies’

claims for restitution sound in law.-7- {¶ 13} Mahle Behr and CPC Parts argue that their equal-protection clai ms raise an issue not present in Cleveland , though. These alleged constitutional claims seek the same relief as the unjust-enrichment claims, making them legal claims under our earlier analysis. In fact in the general fact pleading of each complain t, each plaintiff states “[t]he Bureau of Workers’ Compensation violated the Ohio Constitution by unconstitutionally interpreting the Ohio Administrative Code and the Ohio Revised Code against Plaintiff and employers in the large deductible program.” Mahle Behr Amen ded Complaint ¶ 40, CPC Parts Intervening Complaint ¶ 37. And under the “unjust enr ichment” first cause of action portion of each complaint, each alleges “[t]he Bureau of Workers’ Compensation unconstitutionally applied Ohio statutes and administrative cod es.” Mahle Behr Amended Complaint ¶ 48, CPC Parts Intervening Complaint ¶ 45. We addres s whether the alleged separate allegation of the constitutional nature of their claim s raises a separate jurisdictional question. {¶ 14} The waiver of immunity in R.C. 2743.02 allows suits against the state “in accordance with the same rules of law applicable to suits betwe en private parties.” R.C. 2743.02(A)(1). Based on this language, the Tenth District 1 “has consistently held that constitutional and Section 1983, Title 42, U.S.Code claims are not actionable in the Court

of Claims.” Bleicher v. Univ. of Cincinnati College of Med. , 78 Ohio App.3d 302, 306, 604 N.E.2d 783 (10th Dist.1992). In other words, “the Court of Clai ms lacks subject-matter jurisdiction over alleged violations of constitutional rights.” Hernandez v. Ohio Dept. of

Rehab. & Corr. , 10th Dist. Franklin No. 17AP-37, 2017-Ohio-8646, ¶ 8. The cou rt has

1 The Tenth District has had the most opportunity to consider th ese jurisdictional issues, “[b]y virtue of being the statutory appellate court from the Co urt of Claims.” Reynolds v. State, Div. of Parole & Community Servs. , 14 Ohio St.3d 68, 72, 471 N.E.2d 776 (1984).-8- reasoned that the statutory language limits a plaintiff in the Court of Claims to causes of action that he could pursue if the defendant were a private par ty and that an alleged violation of constitutional rights requires an element of state action. Bleicher at 307. {¶ 15} The constitutional claims in the cases that apply the Tenth Dis trict’s principle almost invariably involve suits that assert the constitutional violation as a private right of action and seek relief for the violation. For example, in Henneke v. Ohio Dept. of Ins. , 10th Dist. Franklin No. 11AP-254, 2011-Ohio-5366, the plaintiff filed a complaint against the Ohio Department of Insurance (ODI) alleging that the ODI’s revocation of her surety bail bond license violated her rights of equal protection and d ue process under the Ohio

and United States Constitutions. The court held that her causes of action for violation of her constitutional rights were not cognizable against a private party. The wrong alleged

in that case was the violation of the constitution and the reli ef sought was for the violation. {¶ 16} But not every allegation of a constitutional violation is broug ht as a private

cause of action that seeks relief for the violation itself. Ind eed, the Tenth District recognized this in Ohio Hosp. Assn. v. Ohio Dept. of Human Servs. , 10th Dist. Franklin No. 88AP-1034, 1990 WL 85136 (Jun. 21, 1990), affirmed , 62 Ohio St.3d 97, 579 N.E.2d 695 (1991). In that case, the plaintiffs filed suit in the Cour t of Claims against the Ohio Department of Human Services (ODHS) alleging that an administra tive rule violated Ohio and federal statutes and the United States Constitution. They s ought injunctive, declaratory, and monetary relief on the grounds that ODHS had v iolated their rights under agreements between the parties, Ohio and federal law, the Ohio Constitution, and the United States Constitution, including the due process and equal protection clauses in the Fourteenth Amendment. The Court of Claims found (among other th ings) that the-9- enactment of the administrative rule violated the plaintiffs’ d ue process and equal protection rights. On appeal, ODHS argued that the plaintiffs c ould not bring the constitutional claims directly under the Fourteenth Amendment. It contended that the claims should have been dismissed, because the claims could be brought only as a Section 1983 claim, which is not actionable in the Court of Cla ims. But the appellate court rejected this argument. The court determined that, though a Sec tion 1983 action could not be brought, the plaintiffs were entitled to raise the issue s in their constitutional claims directly. The court stated: “ODHS cites no authority, and we ar e aware of none, which lends credence to ODHS’s contention that allegations of constit utional violations by a state’s enactment of legislation cannot be brought directly und er the Fourteenth

Amendment.” Id. at *9. The court of appeals ultimately held that the plaintiff s’ rights to due process and equal protection were not violated by the enactment of the administrative rule. ODHS appealed to the Ohio Supreme Court and challenged th e appellate court’s determination that the plaintiffs were entitled to raise their constitutional claims directly. But because the Court found that the plaintiffs were entitled t o relief under Ohio and federal law, it declined to address the constitutional issue, w hich it called the plaintiffs’

“alternate basis for relief.” Ohio Hosp. Assn. v. Ohio Dept. of Human Servs. , 62 Ohio St.3d 97, 105, 579 N.E.2d 695 (1991). 2 {¶ 17} In the present case, we conclude that Mahle Behr and CPC Parts’ allegation that the BWC violated their equal-protection rights did not con stitute a separate and distinct unactionable constitutional claim. Artful pleading can not convert their claim into a

2 The Court affirmed the appellate court’s judgment, though it v acated as moot “the portion of the court's decision that addresses the constitution ality” of the administrative rule. Ohio Hosp. Assn. , 62 Ohio St.3d at 106, 579 N.E.2d 695.-10- separate independent claim for relief for the alleged constitut ional violation. Rather, this action seeks restitution for the BWC’s alleged misinterpretatio n of Ohio law, and the constitutional interpretation of the administrative code is mer ely an alternate basis for that

relief. See Lingo v. State , 138 Ohio St.3d 427, 2014-Ohio-1052, 7 N.E.3d 1188, ¶ 38 (“Regardless of how an action is labeled, the substance of the party’s arguments and the type of relief requested determine the nature of the action.”); Cirino , 153 Ohio St.3d 333, 2018-Ohio-2665, 106 N.E.3d 41, at ¶ 25 (quoting the same). In t his case, we hold that the Court of Claims has jurisdiction to address the claims of a n equal protection violation, if it finds that the plaintiffs are not entitled to relief on o ther grounds, see Ohio Hosp. Assn. , 62 Ohio St.3d at 105, 579 N.E.2d 695, quoting Burt Realty Corp. v. Columbus , 21 Ohio St.2d 265, 269, 493, 257 N.E.2d 355 (1970) (“ ‘No court should * * * indulge the constitutional issue if the litigant is entitled to relief upon other grounds.’ ”).

III. Conclusion {¶ 18} The sole assignment of error is overruled. The trial court corr ectly determined that the Court of Claims has exclusive jurisdiction over the plaintiffs’ claims. The court’s judgment is affirmed.

. . . . . . . . . . . . .

TUCKER, P.J. and FROELICH, J., concur.-11-

Copies sent to: Jennifer L. Myers Ronald A. Fresco D. Patrick Kasson Thomas N. Spyker James D. Abrams David J. Butler Jennifer D. Brumby John Smart Hon. Gerald Parker